Since education makes a person more likely to leave your region, how do you justify your investment in human capital?

Monday, June 20, 2011

Brain Drain Patterns

The migration story is so entrenched in our culture as to be a paradigm. People are leaving the Rust Belt for the Sun Belt. While technically true, population loss doesn't necessarily equate to brain drain. Likewise, a dramatically increasing population doesn't necessarily equate to brain gain. From the Federal Reserve Bank of Cleveland:

In a recent paper, Ed Gleaser and Kristina Tobio look at the trends in the Sunbelt, where most fast-growing cities are found. They find that productivity gains in the Sunbelt have not greatly outpaced the nation’s since 1980, and demand for the amenity of warm weather has also been unchanged. They explain the continued rapid population growth in the South as a response to large increases in the supply of housing. Policies that encourage low-cost construction may be the ones some regional leaders want to pursue, if they want an expansion of both their graduate and nongraduate populations.

If it is the ratio of college graduates to nongraduates that really matters, then policies that promote total population growth are unnecessary. Resources can be directed elsewhere. Thirteen large MSAs in the top category added fewer graduates than the national average, but still made the top degree share category because their nongraduates figures were even further below the national average. These educated, slow-growing places include Philadelphia, Chicago, and Hartford. These places have succeeded in raising their education levels despite attracting and retaining very few nonskilled workers relative to their initial populations. Keep in mind that this is not that same thing as saying that slow growth will cause a region’s degree share to rise. As Tim Dunne explained in his 2007 commentary, northern, cold weather cities with lower degree shares in 1970 actually shrank in most cases. This did not enable all of them to significantly raise their educational attainment at the city level. At a metro level, their regions remained in the middle or bottom of the rankings.

The war for talent picture is much more complicated than most appreciate. The Sun Belt is winning the population race. Where are the productivity gains? Shrinking (relatively speaking) the number of nongraduates can have a positive economic benefit for a region. That said, regional goals are still cloudy. The problem is with the sweeping geographic abstractions.

At the same time, [Philip G. Altbach (director of the Center for International Higher Education)] argued that brain drain is both more limited and more diffuse than people tend to think. Of the former, he noted that "we are talking about a tiny top of the huge system" of higher education all over the world. "There is not a global arms race for community college teachers," he noted, but one for top researchers.

And while there is a pattern of "centers and peripheries" with those in the latter moving to the former, there are actually many "centers," Altbach said.

South Africa, he said, is "bleeding" scholars to Britain, Canada and, to a lesser extent, the United States. But the country is "stealing from its neighbors," attracting academic talent from African countries that don't have South Africa's research infrastructure. Saudi Arabia is "hiring from other Arab countries, and draining some of the best scholars from Egypt and Syria," he said.

And, of course, he said, "the Americans steal from everybody."

The best brain magnets steal from everybody. What is the dominant pattern of talent imports in your region? Superstar cities enjoy a global portfolio. Struggling cities tend to be parochial. Those in between have a regional draw.

I argue that the last recession dramatically altered the rules of the game. The current climate favors the parochial, a result of the decrease in geographic mobility and the increase in value for companies to locate near where the talent is produced. Just as we are beginning to better understand talent migration, the ground is moving under our feet.

All cast considerable doubt on the retention obsession. Keeping graduates from leaving is now a goal, instead of a means to some policy end. A higher rate of retention, similar to population growth, is equated with success. Relatively high retention is, in my view, a red flag. A region cannot grow a large and diverse talent base without strong outmigration. Which superstar cities are tops nationally in talent retention?

Concerning brain drain, there are more questions than answers. The overall baseline assessment is, at best, poor. Doing away with the Rust Belt vs. Sun Belt dichotomy would be a good place to start formulating better talent policy.